General

The overall performance of the examinees as well as the passing percentage has improved as compared to previous attempts. Despite the fact that in total, paper contained about eighteen diversified questions, a marked improvement in the quality of answers had been noted. The question-wise comments are as follows:

Q.1

This was an easy question and majority performed satisfactorily. Some of the students who could identify the factors affecting elasticity of demand, were unable to explain it correctly and many preferred not to offer any explanation.

Q.2

(a)

A large number of candidates were not aware that  international trade includes import as well as exports. As a result they emphasized on the benefits of exports. The real benefits such as better factor pricing, accessibility to scarce resources, specialization etc. were not properly discussed by majority.

(b)

The result was good but still it was surprising to note that a reasonable number of students did not know the main exports and imports of the country.

Q.3

Most of the students were able to draw correct labeled diagram, but were unable to explain the relationship between the curves. Specially a large number couldn’t point out that MC curve cuts the AC curve at a point where AC=MC.

Q.4

(a)

Nearly every student could write the characteristics of perfectly competitive market, but very few submitted appropriate explanations with each point. Some mentioned normal profit, single price etc. as characteristic, whereas these are the outcomes of many characteristics.

(b)

Majority wrote about substitutes and complementary goods with no reference to marginal utility.

Q.5

Quite a good number of candidates classified the economies of scale into two, that is, internal and external. But very few defined the economy of scale correctly. Most common mistake was that students identified the various economies but did not offer any explanation for the same.

Q.6

Many students restricted their answer to only one difference between quota and tariff, that is, former is quantity restriction and latter is price restriction. Differences with reference to government revenue, impact on consumption etc. were largely missing.

Q.7

The overall response was satisfactory. However, definitions of indirect taxes were mostly improper.

Q.8

A small number attempted this question and out of them very few could analyze the impact of government policies (fiscal, monetary, commercial, industrial etc.) on employment, balance of payment, prices, living standards etc. in free economy. Some spent time in describing unasked characteristics of free economy.

Q.9

This question was a high rewarding one for examinees. However, ignoring the marks allocated many students wrote very lengthy answers filling pages and pages and as a result wasted lot of their precious time and also left adverse impact on the examiners.

Q.10

(a)

Students were found familiar with the term national income and its calculation. Purposes of calculation of national income were submitted correctly by majority.

(b)

Majority was familiar with the concept of circular flow of income and described it well.

Q.11

(a)

The performance was generally good, however, some mixed up the functions of money with its features i.e. material, significance etc. gaining no reward.

(b)

With regard to institutions of money market wide spread confusion prevailed. Those with poor English confused institutions with instruments. Others with some better sense confused them with different kinds of money market. At times they were not able to distinguish between money and capital markets.

Q.12

(a)

Despite the fact that a large number of students seemed to have studied the function of SBP as lender of the last resort, they missed the methodology of performing the said function which was the essence of this question.

(b)

A good number of students wrote about the tools of credit controls. But very few mentioned the purpose of controlling the credit in the country.

Q.13

Majority of the students left the question half way through after repeating one thing over and over again i.e. about the surplus funds being transferred to the deficit units of the economy through intermediaries. Very few took time to mention aggregation, maturity transformation and low risk for savers, which are the main reasons for introduction of financial intermediaries.